Powertech, a 100% owned subsidiary of the JSE-listed Altron group, comprising Altron TMT (amalgamation of Altech and Bytes) and Altron Power (Powertech), over the years, adjusted and reviewed operational processes to accommodate market conditions, all of which have produced positive end-results enabling the group to be where it is today, the country’s leading suppliers of cables, transformers, system integrators, engineering solutions, automotive and industrial batteries, Powertech CEO Neil Kayton comments.
Powertech has world-class local manufacturing capabilities and technical resources that enables it to be perfectly placed for local and regional growth.
“The way we do business in South Africa and Africa constantly changes. The euphoria of post-1994 South Africa has quietened into a realisation that the realities of business and global competition need to be addressed for the South African market to remain competitive. South Africa is no longer the stepping stone to the rest of Africa. The rest of the continent is coming into its own, and we need to ensure that South African businesses do not get left out of this regional growth opportunity due to ‘internal’ sluggishness from business and government. At Powertech, I believe we have streamlined and refreshed for the future. Many of our customers are active regionally, and we are with them all the way. We are lean, at the forefront of our industries and flexible. All qualities that makes us the preferred choice in the markets within which we operate,” he explains.
Powertech’s key area of activity is in the electrical infrastructure sector; it offers balance of plant products that can provide a quality and reliable contribution to the electrical infrastructure environment in South Africa and Africa. The company has expanded their vision from being purely a manufacturing entity to becoming a solutions and services business.
In 2013, Powertech System Integrators was launched aimed at assisting their customers to improve their operating efficiencies and The Powertech Group also acquired Powertech Quadpro a turnkey substation business.
With a strong sales presence in Africa and manufacturing hubs in South Africa and in Europe, Powertech’s footprint is vast enough to service the potential industry growth that Africa as a continent is set to embark upon.
Kayton says: “Business directions change. South Africa is a global economy; it is no longer a small market at the bottom of Africa. It faces stiff competition, in particular from the East. Issues in South Africa such as labour unrest, strikes and other hot-beds for social change have made many global businesses look at central and eastern Africa as a base to penetrate the African market rather than investing in South Africa, our group is fortunate to have already established a regional presence in Africa”.
“The African market is being viewed a lot more closely. There is the realisation that Africa is the ‘dark continent’ in terms of electricity – it is one of the last continents that needs to be electrified owing to its large population, which needs internet connectivity and electricity to improve their lifestyles and living standards. This presents many infrastructure development opportunities and I believe that Powertech Group, through its innovative management and bouquet of offerings, is exceptionally well placed to garner further business throughout the continent,” says Kayton.
With South Africa’s high level of renewable energy potential it was established that some 3 725 MW could be generated from renewable energy sources thereby ensuring the continued uninterrupted supply of electricity.
This is in line with the capacity allocated to renewable energy generation by the South African government in in its Integrated Resources Plan from 2010 to 2030, which will see the government earmark billions of rands for renewable energy projects.
With the grid parity between alternative energy sources and life cycle cost of electricity becoming levelised, it made sense for Powertech to enter the renewables sector owing to its core business being in the supply of products that are both suitable for alternative energy sourcing and traditional projects.
Powertech Renewables business development manager Gary Venter tells Engineering News that the company offers a wide range of products suitable for the renewables sector. “Because the renewables sector in South Africa is still in its infancy, many of the key players at present are foreign entities that have joint-ventured with local concerns and engineering, procurement and construction contractors (EPCs).” “Despite being new to this sector, we have supplied a substantial amount of product to Rounds One and Two of the renewable projects programme.
Foreign investors have now assessed that the required quality, technology and products can be sourced locally, and in addition to local content requirements becoming higher at each round, the awareness of the Powertech balance of plant product services, has enabled us to ‘catch-up’ very quickly to become a key source of supply to the renewable energy sector in South Africa. Our customers know Aberdare Cables, Powertech Transformers and Willard Batteries – the Powertech name is a powerful and reputable brand.”
“We are being selective in how we expand our basket of products and look carefully at any product before we include it in our menu of offerings. We are moving in both lines of supply i.e. non-renewable specific and renewable specific product. The solar, photovoltaic and wind options are gaining momentum as viable alternatives. The ever increasing cost of power has made alternative sources of energy a more viable option than it previously was. This obviously has a positive impact upon the ‘go green’ initiatives implemented across our towns and cities,” says Powertech Renewables senior GM Kobus Morgan.
Openings and Closings
Powertech Transformers recently announced the opening of its small power transformer facility at their premises in Pretoria West. Specially designed and built to improve the flow of a transformer through the manufacturing process, the sizes to be manufactured at the facility range from 20 MVA to 60 MVA 132 kV.
The facility was locally designed and local manufacture will double the small power transformer capacity, with the new capacity being 4 400 MVA which equates to 120 transformers a year making the company’s revised factory capacity inclusive of medium power transformers and large power transformers 13,680 MVA a year. The company has stated that they have nearly doubled their capacity in this market in anticipation of a potential R250-million increase in exports and possible local requirements.
In February, Powertech sold its 50% stake in intelligent lighting control and energy efficient lighting supplier Tridonic SA to Tridonic Holding GmbH, Austria thereby dissolving its joint-venture with Tridonic Austria.
Kayton explains that Powertech took the decision to focus on its core business of power electronics. “Selling our stake has enabled us to focus more on other areas of business, while at the same time allowing Tridonic to expand their business in Sub Saharan Africa – it was a win-win deal.”
Riding the Rail
From the early 80s, the focus on the development and maintenance of rail infrastructure in South Africa started to stagnate. A result of this long-term neglect is that road freight increased leading to the deterioration of the existing road infrastructure which had not been constructed to carry the current amount of freight, and weight. In 2005, the South African Government decided to re-invest in rail and rail infrastructure development and improvements, not just within South Africa but also up to the borders of neighbours for example, Mozambique and Zimbabwe and more recently Swaziland.
Powertech key accounts manager: rail, ports, harbours and mining Lucas van der Schyff notes that the company became more actively involved in rail infrastructure development in 2010. “We became involved in every major turnkey project that was and is currently in operation in respect of products that we supply in projects as well as in rolling stock, making us a key player in this sector.
“Powertech has three business units involved with Transnet and Passenger Rail Agency of South Africa: transformers, cables and batteries. Having had our own research and development division for transformers, in 2010, we put a package into place to manufacture our own locomotive traction transformers. We are currently at the prototype stage making 2014 a very exciting time to showcase our manufacturing expertise in this sector. We believe local is the better source!” he exclaims.
The downtime from road transportation is a large factor in the push for the revitalisation of the rail sector and its associated industries. Time is wasted queuing at border posts; compulsory long haul driver stop-overs; weight haulage constraints on roads; the damage to road infrastructure; the transportation of large shipments of freight by road is logistically an expensive operation. All of these elements can be eliminated by efficient use of rail, which is continuously in operation, not weight constrained and does not damage the infrastructure. The benefit to industry and in particular the mining sector, from an updated rail system, will be immense, not only in delivery, but in cost efficiencies.
Therefore the opportunities that exist for Powertech as rail infrastructure development receives the much needed attention are vast. The locomotives and line side elements of these revitalisation programmes is precisely where Powertech excels. “The group has the resources, the required technology, the skills and expertise to supply a combination of quality products backed up with professional support systems,” says Van der Schyff.
“The spin off from these rail infrastructure upgrades is that it will create jobs, increase cross border trading, initiate small town development and therefore community upliftment. So while it has strong business implications there is the positive ‘human’ development element as well.”
“Powertech is able to offer the full service package required for rail infrastructure re-development projects. There is no need to source elsewhere for the required product – we have the required products and technologies. We have the training programmes, we have service level agreements in place, we source raw materials locally and obviously we have been BEE-compliant for some time,” Van der Schyff concludes.
The Future Is Africa
“Historically, through South Africa’s membership of the Southern African Development Community (SADC) over the last ten years, South Africa was the main source of supply for quality industrial product and technologies. However, that has changed. The influx of international competition, particularly from the East, and the opportunities that are presenting outside of SADC, means that we are now competing in terms of quality, duties and cost against leaner economies,” says Powertech Africa GM Darin MacAllister.
Powertech Africa has a more strategic vision for its African expansion, reviewing its core strengths and where they can be most optimally deployed. There is a need to strengthen its SADC relationships and, in conjunction with existing partners, explore new markets that offer trading potential. The DTI could assist local exporters by revisiting the issue of trade incentives to make South African exports as competitive as other international, subsidised players.
“We have to change the way we trade with African markets. There is a large demand for skills upliftment, joint ventures, licence and technology exchange agreements. It is no longer an option to merely sell our product into Africa, we have to engage with local original equipment manufacturers, incentivise and provide training so they can benefit and profit from the electrical and electronics technologies and turnkey solutions we can provide – making it a win-win partnership across all the sectors we are active in,” says MacAllister.
MacAllister adds: “I believe that the key to our success in Africa lies with understanding the local cultures, and that personal relationships are crucial to building a sense of respect and trust. We already have a presence in Namibia, Mozambique and Tanzania and we have done extensive substation work in Zambia. We intend to identify the African opportunities, engage across a wider range of partner options in a more focused and strategic way, moving away from our traditional approach, in how we present our solutions and associated support services. We are embarking on a new fresh drive into Africa – the new Powertech Africa Push!”
Belief in our Abilities
“Africa is where the greatest potential is, it is definitely growing. The Altron Group, and with it Powertech, has the reputation, the professionalism, the people, the products and solutions to join in this growth, to assist in the development not only of the continent’s infrastructure, but their communities as well. We are well established in South Africa, there is no question about our reputation here. In order to continue our growth, we need to travel upwards into Africa. We at Powertech are always reviewing and re-thinking our way forward, and I believe the way forward is Africa,” concludes Kayton.